Otago Southland Employers Association chief executive Virginia Nicholls said many tourism operators were struggling due to the Covid-19 outbreak in China.
"Needless to say [it’s] hugely challenging ... no-one really knows how long it’s going to last but some businesses are really starting to hurt particularly in tourism."
Ms Nicholls is pushing an idea for a Government campaign to get more domestic tourists into the South.
"Let’s get proactive and see if we can bring more local tourists down to our region.
"We think the Government should be supporting that campaign. It makes a lot of sense."
Many people were considering boycotting international travel; sticking to holidays within the country could be a solution.
"We’re saying ... we’ve got an amazing country here, why not come and obviously down in Otago Southland it’s quite incredible what we have to offer."
In a speech to the Auckland Chamber of Commerce yesterday, Finance Minister Grant Robertson said businesses should talk to their banks and plan for how to manage the economic impact of Covid-19.
Mr Robertson warned that New Zealand would experience a "short, sharp" economic hit.
Otago and Southland tourism businesses were particularly anxious, Ms Nicholls said.
"We’re dealing with a lot of different businesses who have had a considerable drop and they’re either a tourism business or they’re related to a tourism business."
She said businesses might consider measures such as reaching agreements with staff to use leave or consider a four-day week.
"With the skills shortage out there at the moment nobody wants to lose any of their employees but they can’t necessarily afford to keep them ... It’s very hard."
